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Exporting Halal Food To The China Market

Published: 23, March 2015

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In China, Halal food caters to modern people's new requirement of healthy food with its supreme quality and also its characteristics such as "green, purity and non-pollution". Other than China muslims, other ethnic groups in China also endears this dietary culture. This means that apart from the muslim community in China, Halal food is growing to becoming a trend of dietary culture for the whole China community. The growth rate of Halal food industry in China is keeping a constant rate of 10% each year, and in year 2006, the trade amount of Halal food in China was over 2.1 billion USD.

With the increasing demands of Halal food in China, The Malay Chamber of Commerce Malaysia (DPMM) of Sabah has made a statement to encourage the investment of Halal food industry to prepare for the growing demand in China. The Halal Industry Corporation's chief executive officer also gave encouraging statements to the Halal food industry, stating that although Halal products made up to less than 10 per cent of the total global trade, there is a big potential for the HAlal industry players to tap the markets in China, India and other non-Muslim countries due to the fact that they are lacking the market in their respective countries.

In recent news reports on the visit of Chinese Premier Wen Jiabao to Malaysia in April 2011, discussions have been done on the aspects of trade balances between China and Malaysia. As China aims to achieve a balanced bilateral trade with Malaysia by exporting more products to Malaysia, Malaysia will be opened to the importing of Malaysia's commodities and food products. China is a growing market in Halal food and it is a potential market that has so much room to for the Malaysian Halal food industry to expand its business into. There are many prospects in the expansion of local Halal food industry to the China market, making it a jumpstart for local Halal SME food companies. The market growth on the Halal products gives opportunities for the Halal food industry to further exploit the market to meet consumers' demand and with Malaysia having a target to become the regional Halal hub, such cooperation from other nations helps in achieving the goal.

As a matter of fact, Malaysia and other Southeast Asian countries have been enhancing their cooperation with China in various fields, such as agriculture, manufacturing, fisheries and infrastructure. Such bilateral trade agreements have achieved fruitful results, creating a win-win situation between both countries. With the start of the Asean-China Free Trade Area, vast opportunities for future prospects of cooperation in terms of trade between Malaysia and China for food industries. China has also continuously encouraging Malaysian enterprises to seek business opportunities in China after China opened their market to foreign investors and welcomes other countries to export products to China. By having these advantages, it is relatively easier to penetrate the China market in terms of food production, although challenges still await the Malaysian food industry for the export of Halal food products to China.

The Halal food industry in Malaysia is very established and has gained trust from many muslim and non-muslim countries in the requirements of obtaining Halal certificates for food products in local food industries. In China, Halal certificates issued by The Islamic Development Department (JAKIM) of Malaysia are being recognized, and the Halal certification of China is also being recognized by JAKIM in Malaysia. Although there is no compromise in the stringency of the requirements to be fulfilled prior to the approval of Halal certification to food industries, the government provides assistance through agencies such as HDC to provide training and consultancy and also knowledge sharing and information to companies that are keen in obtaining Halal certificates.

Current food companies that are involved in Halal food products are involved in the production of ready-made food products that can be easily exported to other countries. This scope can be further expanded depending on the needs of the importers of Malaysia food industry. Other than planning to penetrate the China Halal food market by importing food products that are Halal that are either ready-made for consumption or food ingredients that can be used for cooking and further production of Halal food products, raw materials such as Halal beef and mutton can also be one of the food commodities that is able to export to China. The slaughtering and food handling techniques that comply to the Halal standards will be able to gain interest from the muslim community of China, as the muslim community in China is minority and there might be lack of facilities that carry out Halal slaughtering and handling of such raw materials.

In order for Malaysia to reach the status as a key player in the international Halal industry, the government has implemented various programmes via government and semi-government agencies. The Halal Industry Development Corporation (HDC) has introduced the annual Halal Industry Partners Programme (HIPP) that recognizes companies that play a significant role through participation and contribution to the industry to further encourage capacity developments for the companies. HDC also introduced training programmes designed for both muslims and non-muslims that are keen to learn more about Halal manufacturing and processing, in order to prepare themselves for future business expansion to other nations such as China.

Other than being well-established in the requirements to obtaining Halal certificates, Malaysia has the resources to merge as a major Halal food producer in the international Halal food market. For instance, a Halal hub being established in Bintulu, Sarawak and is expected to be fully operational in the next few years. This major leap in Sarawak Halal food industry will push Sarawak to becoming a major producer of Halal food in the country with the adoption of modern agricultural practices. As the agriculture sector in Malaysia is well-established, the supply of raw materials and ingredients are easily monitored to comply with Halal requirements. An adequate supply of raw materials and ingredients will be able to achieve with modern agricultural practices by adopting biotechnology to ensure the food produced is safe for consumption and for export. Other than that, being a muslim country, Malaysia provides the optimum environment and the culture to produce Halal food products that are able to fully meet the requirements in terms of religious point of view, thus gaining much trust in the international Halal food industry.

Besides providing established requirements for the approval of Halal certificates in Halal food industries, the diversity in ethnics in the Malaysian population brings about the development of creativity and innovativeness in the food industry. As China is a non-muslim country to start with, local Malay or muslim delicacies might be harder to penetrate the food market of China, where the population of China comprises of a majority of Chinese that are not exposed to Southeast Asian cuisine. The creativity and innovativeness of local Chinese in modifying the conventional Halal menu will be able to capture the Halal food market in China by introducing Halal food that are more appealing to the muslims and non-muslims in China. This means that Halal food that are meant for export to China will be able to further accommodate to the appeal of Chinese in China to ensure market penetration of not only the muslim communities, but also to non-muslims that have increasing awareness of the goodness in Halal foods.

Efforts in the research and development of Halal food products also further prepare Malaysia into becoming a world Halal hub. JAKIM has launched collaborations with the International Islamic University Malaysia (IIUM) in the research on Halal products including food and health supplements, boosting the development of Halal food industry in the country. The main focus of this collaborated research will include the expertise of IIUM in various fields of research in the identification of Halal products that are free from non-halal deoxyribonucleic acid (DNA) content, which is an advancement in ensuring food products being produced are authentically Halal with minimum chances of contamination from non-Halal sources. By having such researches, the integrity of Halal products produced by Malaysian food industries will be able to reach a higher level and more trust will be given by the international Halal food market upon the Malaysia Halal food industry.

For Malaysia to bolster its position further as a key player in the Halal industry, the private sector is needed to expand its role other than focusing on their strong manufacturing capability. The private sector should contribute to the Halal food industry through business community's contributions to guarantee sufficient funds for harnessing resources and adopt a holistic approach to consolidate the Halal industry. More reliable Halal supply chains should also be developed to support the growth of the industry, which includes adequate supply of raw materials, ingredients, testing facilities, packaging etc. to ensure the purity of Halal products. Larger companies could play their roles in nurturing the capabilities of SMEs in becoming suppliers of Halal products and services to become sustainable vendors and suppliers, so as to strengthen the supply chain for the Halal industry. Only by establishing and strengthening the supply chain for Halal industry in Malaysia will the nation is able to accommodate to the demands in China, which is one of the top countries in population.

Other than seeking the cooperation of private sectors to play a role in the efforts to advance Malaysia to becoming a key player in the Halal food industry, the initiative to merge the Halal food sector and Islamic finance industry will further entrench Malaysia's leading position in the global Halal industry. As syariah-based industries were growing between 15 and 20 per cent annually with perfect complementation among them, the industries formed the foundation of the new economic paradigm of the Halal industry internationally. Malaysia's innovation in Islamic finance has resulted in a comprehensive environment that is rich in diversity with vibrant financial institutions and continuous product innovation and market activity. While the Malaysia's Halal industry is worth RM15 billion and is growing by 5 per cent every year, the efforts of Malaysia's government and agencies that supports the growth of Halal food industries in Malaysia will be able to bring upon the capability of Malaysia's Halal food industry in the penetration of China's Halal food market and also further stand firm in the international Halal food market.

As a conclusion, Malaysia has a huge potential to penetrate the Halal food market in China as Malaysia has already obtained bilateral trading ties with China. The competency of Malaysia in producing well-recognized Halal food products and various assistance from the government and the cooperation from private sectors are also factors that will lead to the success in penetration of China's Halal food market.

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